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Architecture the Hardest Hit Profession by the Recession

Emilio

But, lb, read that statement carefully. "When times are tight" says that architects, like everyone else, are subject to the marketplace. That one in four architects are out of work may also say that there are too many architects: our supply simply outstrips the demand right now. I do agree that we can work to create more demand for ourselves, but only to a degree. There are many, many factors as to why a profession or trade is seen as more or less dispensable when times are tight. I just don't buy that this "bad perception" of architects, perpetuated by "the Stars and the Glassy and the Shiny" is much of a factor.

Jan 1, 10 9:10 pm  · 
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aldorossi

Please be careful when paraphrasing. No where have I suggested that people have bad impressions of architects because of the "stars". Please re-read liberty's last post.

"The fact is that people aren't using architects right now because there's little getting built or in the planning stage. People will use more architects again when they need them again, in the same way that, if moviegoing and renting all of a sudden took a major dip, a lot more actors would be out of work because less movies would be made, and the ranks would not replenish until the public went to see and rented more movies again."

Probably not the best analogy. I would like to think that what we do is has more relevance in the day to day lives of people than movies. I guess you're falling on the "Architects are Dispensable" side of the argument. You're correct: I disagree.

And I'm sorry but you have to clarify what you mean by "quality of the client".

Jan 1, 10 9:31 pm  · 
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liberty bell

I guess an analogy could be the Shiny Icon building equals the end-of-the-year blow out office party that firms like AIG etc. got in trouble for having last year: it seems excessive. It's harder to sell the idea of "value" in squishy areas like employee morale when money is tight; even though it's pretty broadly acknowledged that employee productivity is vastly better when the workspace is more pleasant, that's a hard number to quantify similar to how one can quantify, say, not spending money on construction. It's easy for a company, institution, or government to just say "No capital spending this year." and thus appear, to shareholders etc., that they are being fiscally prudent. Saying that new windows and carpet will make the staff happier and thus increase the bottom line has always been a harder sell.

Jan 1, 10 9:41 pm  · 
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WonderK

Fitting that I am reading this thread while I am watching the educational institution which granted me my architecture degree get decimated in the Sugar Bowl. :o(

Jan 1, 10 10:06 pm  · 
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Distant Unicorn

By the shortbus state nonetheless!

Jan 1, 10 10:11 pm  · 
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Emilio

"Agreed. But like it or not, it's the Frank Gehrys and not the Sam Mockbees that are know as "Architects" now. And when a client tells me he can't afford "Architecture" any more, or "don't give me any design", whose problem is that?"

"And you should care who is getting all the attention! It amounts to how the profession is perceived in the larger culture."

So the above are not suggesting "that people have bad impressions of architects because of the "stars" " and the attention paid to the few? Coulda fooled me.

Didn't say that architects are "dispensable", just subject to the marketplace like anyone else (and they are, whether you like it or not).


And I'm sorry but you have to clarify what you mean by "quality of the client".

A good client helps make a good architect. I'm sorry, but a client who says "I can't afford architecture" and "don't give me design" knows not thing one about architects and what we do and is, to my eyes, an idiot, and if that's the fault of the architect, then you have to explain to me how it is (and if you find this last statement arrogant, then sue me.)




Jan 1, 10 10:13 pm  · 
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Distant Unicorn

Simply put, the reason I said architects should have some blame assigned to them is for this reason...

Every building (that's not a birdhouse, a Ted Shed, a tent, a small house or on a farm) requires an architectural or PE stamp.

To have mortgage backed securities, one must have mortgages and houses must be built.

To speculate, one must have tangible assets (real property) to borrow against (or an assload of cash) in which more than likely an architectural stamp or PE license was used to make.

$400k home -> 10% down payment -> $400k instantly borrowable money -> 10 speculative down payments -> $4 million in tangible real estate -> $40 million in meta(tm) money -> 100 homes ($4 million in down payments) -> $40 million borrowable assets -> 1000 homes -> $400 million security -> $4 billion in borrowable assets

The first 4 or 5 jumps here is what is important because you still require a built, tangible asset to borrow against to make happy funtime fake money-- this means you still need architects and engineers to rubber stamp drawings to create assets!

If these people are so smart, they should have said "I'm not sure your local area has the liquidity to absorb the influx of real property you're creating!" Basically... home designers, interior designers, engineers, even some planners or architects (who all practice "Architecture") never did the basic studies that should have shown that these projects that were created to invent money out of thin air were more than likely to fail.

It only takes about an hour to crunch the data (Census TIGER data and taxrolls, available to the public and are FREE) to do a thorough feasibility study.

You know a study that is the litmus test to whether or not an area can pay for development and what kinds of development should be encouraged!

Jan 1, 10 10:27 pm  · 
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msudon

In the interest of adding another familiar name to the blame circle- I have to go all AIA on this:

"Layoffs and furloughs aren't the only ways to keep firms operational in tough times. Rick Bell, executive director of the American Institute of Architects' New York chapter, said entering design competitions, which pay winners, is another way to provide work for a firm. Some of those competitions pay hundreds of thousand of dollars."

(August, 2009 here)

Bwahahahahahh! these hacks totally deserve more grief. that's the best advice they have to offer?

Jan 1, 10 10:45 pm  · 
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WonderK

I can't believe that somebody actually went on record to say that entering design competitions could provide work for a firm. That guy is definitely going on my list.

Jan 1, 10 11:17 pm  · 
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Paradox

"Layoffs and furloughs aren't the only ways to keep firms operational in tough times. Rick Bell, executive director of the American Institute of Architects' New York chapter, said entering design competitions, which pay winners, is another way to provide work for a firm. Some of those competitions pay hundreds of thousand of dollars."

Interesting. I'd recommend everybody to read these then:

http://edgehopper.com/what-toyota-knows-that-gm-doesnt/

and this I'll definitely purchase asap:

http://www.amazon.com/Toyota-Way-Jeffrey-Liker/dp/0071392319/ref=sr_1_3?ie=UTF8&s=books&qid=1262405671&sr=8-3

Jan 1, 10 11:21 pm  · 
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Emilio

yea, ok, orochi, that's a load of caca.......wtf have you been smoking, dude?

Jan 2, 10 12:26 am  · 
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Distant Unicorn

That's the basics of the money multiplier effect.

By converting liabilities into securities, lending institutions could then borrow against that money as if it were cash. It works even better if you're buying other people's securities and then taking out insurance in the form of federal funds money gambling that those securities go belly up (credit default swap).


Essentially, banks were making piss poor "bonds" so that they could play with money that didn't exist.

That's what the "meta economy" is, emilio.

When there's not limitations on fractional reserves and no seperation between lending and investing institutions... this is what they invent. Unfortunately or fortunately, the meta economy has a proportional value to the real economy. According to the federal reserve, only about 2% to 3% of the total money supply consists of physical coins and paper money and closer to about 8% if you include precious metals.

About 90% of the money in the US is fake.

At a money creation rate of 20%, 100 dollars can become about 450 dollars in as little as 10 cycles. If it is at 10%, that 100 dollars can become about 980 dollars.

If you treat a mortgage like money, a 100,000 dollar mortgage is actually about 280,000 dollars in fake money. That comes out to about $2,750,000 of meta money.

So, one must build an actual property of some actual value to be able to reap the money tree.

Jan 2, 10 2:28 am  · 
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Distant Unicorn

Ergo, a party is helping someone build properties of real value is partially responsible for enabling another party to play with fake money.

Jan 2, 10 2:30 am  · 
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Emilio

Yea, sure, architects should have turned down work and stopped their clients from building ("Don't put up that office building, you moron, your local area doesn't have the liquidity: I've got the studies right here!") and then pulled out the crystal ball and foreseen and stopped all the banks, lending institutions, and stock manipulators from making a toxic stew of investements which brought the economy to its knees.

Mother ship to orochi: you're wanted back on your home planet.

Jan 2, 10 11:37 am  · 
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aldorossi

Great summary of how the mess happened, Orochi. In the end, however, our profession doesn't have a strong enough institutonalized sense of ethics to have been able to have any effect on the trough-feeding that went on. Quite frankly, the banks and hedge funds that were trading in CDOs, et al didn't always understand themsleves what they were getting into.

And Emilio, try thas one:

A home owner has heard something about solar panels, that they generate electricity, which sounds lke a good thing, as he might be able to cut his utility bills, and even, if so disposed, play a small part in reducing polluting emisssions from the coal fired plant where his local DWP buys his power. But he also has seen that buying and installing solar panels has a very high up-front cost, and our home owner is having trouble weighing the pros and cons.

He might not even know that there are companies who are leasing solar panels to home owners, the lease payments being offset by the savings on his electric bill. But even this will require some analysis, and he's not sure who might be able to help him do the math.

So our homeower, interested in sloar panels but still a bit skeptical, vists the local home improvement trade fair and trots himself over to the ACME Solar Panel Company booth, where Emilio, ACME's top marketing guy, is ready to sell him some panels.

"Nice to meet you Emilo. I'm interested in solar panels, but I don't think I can afford them"

And with all the sincerity that a seasoned marketing pro can muster, Emilio replies: "You don't know enough about Solar Panels. In my eyes, you're an idiot, I can't help you, and I have no interest in having you as a customer."

Ohhhh kayyyy...

Jan 2, 10 8:29 pm  · 
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Emilio

See, now you're interpreting: I didn't say I would turn down a job from that client, even if I do think he's stupid. I would try to educate him on the value of actually having "architecture" and "design", because, like, basically, it's what we fucking do.

Ohhhh kayyyy?

Jan 3, 10 11:19 am  · 
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ThinkRevit

Architects here in the U.S. should form a union. The AIA does nothing to unite and protect us.

Jan 3, 10 1:24 pm  · 
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file

Unions hold no sway in industries where there's no work. The sorry state of architectural employment is not fundamentally the fault of poor, or unfair, management practices by the owners of firms. We suffer primarily because we work in an industry beset by fundamentally poor economics. No union can - or will - change that fact.

Jan 3, 10 6:14 pm  · 
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oh my god. I've just been lurking in this thread, but I had to pop in after seed's comment. Anyone who thinks y'all should unionize, please search "union" on archinect and read every resultant thread, then get back to me.

Hopefully by then you will realize that a) this is illegal. However over-worked and under-paid architects feel, they are still Professionals, which makes unionization a non-starter. And b) it wouldn't fix anything, because then most clients would decide they didn't need architects to begin with.

Furthermore, I've been a union member in the past and know that people blow straight past union rules in many cases. The members stay quiet because they want to keep their jobs, so in the end it isn't the magic bullet you think it is.

Jan 3, 10 10:23 pm  · 
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sierra

Another article on the Wall Street Journal:

After City Center, Architects Face New Reality

Jan 4, 10 2:27 am  · 
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Paradox

The above link was broken..you can find the article over here:

http://online.wsj.com/article/SB10001424052748703991304574622192481017058.html

Jan 4, 10 3:12 am  · 
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holz.box

unionization would be a waste of time.

though seed is correct, the AIA is a ridiculous waste.

Jan 4, 10 3:31 am  · 
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blah

The Journal article said KPF was hiring

Jan 4, 10 4:23 am  · 
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distant
"the AIA is a ridiculous waste"

I just love reading such broad, unfounded generalizations, delivered up like they're some eternal truth, accepted by all who view them.

I don't believe large numbers of intelligent people put down hard earned money on an annual basis for "a ridiculous waste". There still are way more architects who remain members than who do not -- to say they get nothing for their dues money is to suggest that all these people are either stupid or too clueless to notice. That's simply not the case.

I tend to hear these rude generalizations from individuals who expect the AIA to solve all of the profession's ills overnight, without actually requiring that individual to invest any money, or energy, or time, in helping. More directly, I hear these generalizations mostly from people who have a highly personal agenda for the AIA that's not necessarily embraced by the rank-and-file membership. That's a form of 'sour grapes'.

If you don't want to be a member, fine ... don't join. But, don't use your personal choice to denigrate those many fine members of the profession who are active members and who do devote substantial numbers of unpaid hours to work on a wide variety of issues important not only to their futures, but also to your own.

Those volunteers don't expect your gratitude ... but, neither do they deserve your scorn.

Jan 4, 10 12:39 pm  · 
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liberty bell

Well-said, distant.

Jan 4, 10 1:04 pm  · 
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vado retro

just listened to the economic forum of indianapolis which preempted fresh air today. i usually don't listen to it because the speakers tend to be right wingers. the economist today who;s name i don't have right now was talking about the billions upon billions of dollars lost by the decline of commercial real estate value and the difficulty of the owners to get any refinancing since the loans now outweigh the value of real estate. therefore, the banks are hesitant to loan any money. he called it an equity gap.

Jan 4, 10 1:09 pm  · 
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outed

vado - that is going to be THE problem this year. we have some developer/owners down here who will have long term financing come due on literally hundreds of millions of dollars worth of commercial properties who have publicly stated they are going to have a tough time making up that gap. properties have steadily been foreclosed on, although up until very recently these seemed to be smaller projects (100k sf or less).

throw in falling rents and an inability of the owners to roll t.i. costs up into a lease as easily and you've got a mix, at least here in atlanta, where there won't be any sizable new commercial/mixed use work coming online for a long, long time. those projects that do go forward are going to have to be heavily financed by the developer themselves, a position most won't do.

they're estimating the total loss in c.r.e. values here in the tens of billions - nationwide, there's almost 1T of c.r.e. which has to be refinanced this year or next. how we avoid tons of defaults, i don't understand. the banks still won't write down/off these loans, so we're in for another round of outstretched hands.

u.g.l.y.

Jan 4, 10 1:21 pm  · 
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